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Introduction:
To avoid criminal legal risks in China, gambling websites are generally set up overseas and attract domestic gamblers through various channels. Of course, to ensure the concealment and security of the casino, the casino operators will seek trustworthy friends with a certain degree of financial strength to act as agents, and then rely on their social connections to continuously develop downlines and recruit gamblers for the gambling website.
When one day the online gambling platform is taken down, everyone involved is implicated. At this point, the casino operators, as principal offenders in the crime of operating a casino, cannot escape. So how are the "agents" who introduced customers to the casino to be convicted?
Author of this article: Lawyer Shao Shiwei
01
Starting from the "Jiuzhou Entertainment City" cross-border online gambling case
These are a group of unfortunate children. They were sent by their school to the Philippines to work as casino agents.
On May 7, 2021, in the major cross-border gambling case "Jiuzhou Entertainment City" investigated by the Public Security Bureau of Xinyang City, Henan Province, many criminal suspects involved were graduates of a maritime crew vocational school. Sun, whom a reporter interviewed, stated that six years earlier she had been introduced by the school to work in the Philippines, and six years later she was arrested by Xinyang police. Apart from her, many graduates were arrested after returning to China in Shenzhen,
Changsha, Changde and other places. Among them, some have already been sentenced, some have been prosecuted, and some have been released on bail pending trial [1]. These involved graduates said that they went to work in the Philippines because it was a job opportunity recommended by the school, and they were full of expectations about it; the company told them that doing this work in the Philippines was legal.
What work exactly were they doing? The tasks assigned by the company were: after having them register as agents of the "Jiuzhou Entertainment City" gambling website, they were to promote the website links to others and recruit members for the gambling website to place bets on the platform. The company paid service fees in proportion to the betting and gambling participation of members under their names.
For this series of cases, the judgments of the courts in various jurisdictions of Xinyang, Henan, were not the same.
Some courts found that the defendants "served as agents on gambling websitesaccepting bets, and developing members for gambling websites and obtaining commissions,” constituting the crime of operating a casino,without distinguishing between principal and accessory offenders[(2022) Yu 1524 Xing Chu No. 63]
Some courts found that the defendant “acted as an agent for a gambling website and developed members, obtainingprofit sharing,’” and was an accessory to the crime of operating a casino. [(2022) Yu 1523 Xing Chu No. 183]
Some courts found that the defendant “acted as an agent and developed members, unlawfully seekingcommissions,’” and was an accessory to the crime of operating a casinoaccessory[(2022) Yu 1523 Xing Chu No. 59]
Some courts have found that a defendant who "acted as an agent for a gambling website, recruited members, and collected service fees from the gambling website"service fees" constituted the crime of operating a gambling establishment.
Although China is not a country of case law, "like cases decided alike" and "similar cases decided alike" are nonetheless basic principles.
02
Why do the approaches to adjudication differ so greatly?
Why do courts reach differing determinations for the same conduct? In fact, it is not only in this series of cases that different courts have adjudicated differently; in judicial practice, with respect to the conduct of "sharing a gambling website link with others and obtaining commissions at a certain percentage based on the amounts wagered or won or lost by those others", courts across the country have indeed, in practice,
adjudicated in a wide variety of ways, just as in this case.
In fact, the law does not lack clear provisions on this conduct. Let us look at the statutory provisions:
The 2010 Opinions on Several Issues Concerning the Application of Law in Handling Criminal Cases of Online Gambling (hereinafter referred to as the 2010 Opinions)
II. Concerning Online Operation of Gambling Establishmentsjoint crimedetermination and punishment
Where a person, knowing that it is a gambling website, provides the following services or assistance thereto, this constitutes a joint crime of the crime of operating a gambling establishment and shall be punished in accordance with the provisions of paragraph 2 of Article 303 of the Criminal Law:
(1) placing advertisements for a gambling website,developing membersand other such services, and collectingservice feesin an amount of RMB 20,000 or more;
2020 Opinions on Several Issues Concerning the Handling of Cross-Border Gambling Crime Cases
III. Concerning Cross-Border Gamblingjoint crimesdetermination of
2. Acting as an agent for gambling websites or applicationsand recruiting players, members, or downline participantsof.
Why, then, do some judgments describe “accepting bets” or “obtaining profit sharing”? Because the following legal provisions also apply:
the 2010 Opinions
I. The following circumstances constitute the act of operating a gambling establishment:
(3) serving as an agent for a gambling website and accepting bets (the “agent-type” crime of operating a gambling establishment);
(4) participating in profit sharing from a gambling website (the “profit-sharing-type” crime of operating a gambling establishment).
What is the difference between the two sets of provisions above and below? The answer is:whether the actor is determined to be a joint offender.。
Clearly, if the actor is determined to have collected service fees for recruiting members or downline participants and this constitutes a joint offense, then in conviction and sentencing this will be [more lenient?] than determining the offense as the “agent-type” or “profit-sharing-type” crime of operating a gambling establishment.To be lenient。
Would such conduct then constitute the crime of "agency-type" or "profit-sharing-type" casino operation? Attorney Shao is of the view that it does not. The explanation below is provided in light of the legal provisions.
03
Mere recruitment of downline members should only constitute accomplice liability to the crime of casino operation
1. The actor does not constitute the "agency-type" crime of casino operation
According to the Understanding and Application of the 2010 Opinions on Several Issues Concerning the Application of Law in the Handling of Online Gambling Criminal Cases, "merely serving as an agent without accepting bets does not fall within the 'casino operation' conduct prescribed by the Criminal Law." In other words, constituting the "agency-type" crime of casino operation requires two elements: serving as an agent + accepting bets. If there is no betting conduct,
then the conditions for constituting the agency-type crime of casino operation are not met. Some prosecutors hold a similar view: "If some criminal suspects or defendants do not meet the filing conditions for the crime of gambling or the ordinary crime of casino operation, and it also cannot be established that they served as agents for a gambling website and accepted bets, cases of innocence may arise. [2]"
If an agency account has engaged in the conduct of accepting bets from others, then that account will receive and exercise control over gamblers' funds, and the account can also set bet amounts, commission rates and so on; therefore, compared with a gambling website, an agency account is equivalent to an individual "sub-casino," and its social harm is comparable to that of the operators of the gambling website.
However, where the actor merely shares a link to a gambling website with others to solicit gamblers for the website, and the actor cannot control whether gamblers place bets, the bet amounts, the commission rates and so on, then it is obvious that under this model the actor's status and role are far from comparable to those in the agency-type crime of casino operation.
2. The actor does not constitute the "profit-sharing-type" crime of casino operation
With reference to the above judgment of the Xinyang court, the finding that the defendant "served as an agent for a gambling website and developed members, obtainingprofit sharing" is also not an appropriate description.
According to the understanding and application of the 2010 Opinions on Several Issues Concerning the Application of Law in Handling Criminal Cases of Online Gambling, "in practice, some perpetrators do not participate in the establishment of gambling websites or the specific organization of gambling activities, nor do they act as agents of gambling websites, but rather share in the profits through capital contributions or other means." Therefore, the 2010 Opinions
provide that participating in the profit sharing of a gambling website (the "profit-sharing type" of the crime of operating a casino) refers to parties who hold the status of shareholders or partners of the gambling website; it does not mean that commissions/service fees/profits obtained from promoting a gambling website constitute the "profit-sharing type" of the crime of operating a casino (this label is applied somewhat too broadly, directly characterizing "hired hands" as
"shareholder profit sharing"?)
Closing Remarks
For defense counsel, wherever there is dispute there is a point of defense; therefore, there is considerable room for defense in such cases. Nevertheless, Lawyer Shao hopes that in future cases of this kind, courts across jurisdictions will unify the standards for applying the law and render judgments that are fair, just, and consistent with legal principles for the parties concerned.
After all, under the current legal provisions, the position is quite clear, and there is no obstacle to convicting and sentencing perpetrators in accordance with the existing provisions.
[1] After paying tuition, were they sent by the school to "operate casinos" abroad? https://mp.weixin.qq.com/s/PTYveQO4EJ0DZr2dtHuN8A
[2] [Local Procuratorate] Jilin Longtan: How to determine whether one acts as an agent for a gambling website? https://mp.weixin.qq.com/s/oJvuTySkjXYZFc19SEcITA
